Nokia comeback: Can the Phoenix rise again?

New Delhi: For millions of Indians who made their first mobile phone call with a Nokia phone, nostalgia is about to hit again. A new array of Android smartphones adorned with the ever-recognisable Nokia brand will be made available by June 2017, made by former Nokia employees under a new company – HMD Global.

India, the world’s fastest-growing smartphone market, will be crucial for the company, which will make and sell Nokia smartphones and feature phones for the next decade, under a licensing agreement concluded on December 1. About $500 million will be spent on marketing the brand across the world over the next three years.

“I have never seen in my life that when we enter meetings, customers (distributors or trade partners) hug us – that’s because of Nokia (equity and trust),” Arto Nummela, chief executive officer of HMD Global, told ET, underlining the strong resonance of the brand not just with consumers but also with trade partners, which is why trade partners in distribution channels will take products to the market faster.

“Our ambition for the smartphone business is quite strong. We want to make it into the one of the leading smartphone brands again,” said HMD Global president Florian Seiche.

Espoo, Finland-based HMD Global will create new Nokia phones across price ranges, besides tablets, and will own Nokia’s existing range of feature phones that are sold across the world. Nummela added that Nokia, which leads the feature phones segment in several markets, will have a significant global foothold, including the Americas, Europe, Asia, the Middle East, Africa, India and China, from day one. It aims to launch smartphones in all eight markets at one go.

Nokia had a 70% market share in India in 2008, but its inability to respond to upcoming trends like dual-sim phones took the company down to near-extinction. It eventually lost out to Indian handset makers that had taken the space vacated by the then Finnish giant.

Microsoft acquired Nokia’s mobile phone business two years ago for $7.2 billion. Since then, the software giant has written off about $8 billion on account of the acquisition and fired hundreds of employees. Microsoft then sold it to HMD Global and Foxconn International Holdings for $350 million.

Now, all Nokia devices will be made by Foxconn, an arm of the world’s largest contract manufacturer, which also makes iPhones.

Nummela said Foxconn’s facility in India where feature phones are made will be utilised to ensure supply, along with a Microsoft manufacturing plant in Hanoi, Vietnam, which Foxconn acquired.

While the company did not share the product road map or the number of smartphones and price segments, the chief executive said, “It will be premium execution in each and every price point and we know how important mid-to-low price point devices are in India.”

HMD Global will rely on Nokia’s widespread brand equity to sell devices in markets such as India, where the product line up will be available on ecommerce platforms and in brick-and-mortar stores, including Nokia-branded retail stores.

“Nokia is the one handset brand in India which has the largest residual brand equity from over the last decade. It has the potential to capitalise on it,” said brand consultant Harish Bijoor. “Provided the phone is a hard-working one, fulfils the expectations of average users in smartphones, Nokia has a strong chance of a second coming.”

Nokia’s entry comes as global and Indian market leader Samsung Electronics faces a tough time after the debacle of the Galaxy Note 7 and billions of dollars shaved off the South Korean company’s earnings. Premium Nokia smartphones may well fill the gap created by the marquee model’s absence, where competition will primarily be with Apple, market experts added.

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“There will be a new brand identity — work has started on it,” a senior consultant working on the merged company’s new identity said, speaking on the condition of anonymity due to non-disclosure agreements.